Outstanding Loans Held By Foreign Banks In Japan Increasing
Sunday, May 26, 2002
TOKYO (Nikkei)--Foreign banks operating in Japan hold an increasingly large amount of outstanding loans, primarily as Japanese counterparts rush to sell loan assets to them, banking industry sources say.
In April, the total amount of outstanding loans held by foreign banks stood at 9.87 trillion yen, up 22.4% from the same month a year earlier, according to a Bank of Japan survey.
The figure represents the largest since July 1991, when the central bank started tracking such data using the same method as now.
The substantial loan increase in April came as Japanese banks aggressively sold their loan assets to foreign counterparts, in a bid to raise their capital adequacy ratios ahead of the March-end book closings.
The loan-purchase deals were made mostly under two-to-three month repurchase agreements, the sources said.
The amount of loan assets which Japanese banks wanted to sell to cope with their March-end book closings this year was 20%-30% larger than usual, according to an official at one foreign lender.
Behind the increasing loan assets at foreign lenders is also the fact that they are actively extending loans to real estate firms, an area of lending which Japanese counterparts are trying to reduce.
Hong Kong Shanghai Banking Corp., for example, is expanding a new type of loan, in which if a default occurs, repayments will be made not only through the disposal of collateral but through rental revenue from the real estate involved.
(The Nihon Keizai Shimbun Monday morning edition) |
